Jesus Dureza, presidential adviser on peace talks with insurgent groups in the Philippines, said the government will seek amendments to the country's constitution to allow the establishment of 'a federal Bangsamoro (Muslim nation) governance unit.'

The creation of the federal Islamic state will pave the way for the expansion of the existing autonomous Muslim region in the strife-torn region of Mindanao, which is a key issue in peace talks with the Moro Islamic Liberation Front (MILF).

The Moro Islamic Liberation Front (MILF), the Philippines’ largest Muslim rebel group (photo), has announced it is ready for war, if attacked.

The statement, made by Eid Kabalu, MILF military spokesman, is a response to a recent comment by interior and local government secretary Ronaldo Puno threatening to stop talks with the MILF.

"We are open to all possibilities. We have the right to defend ourselves in our homeland," Kabalu said, quoted by daily The Sun Star’on Friday. However, he asserted that war was the last resort.

A day earlier, the MILF official website, Luwaran, cited Puno as saying: "If the MILF doesn't want our agreement, if they do not want to respect our Constitution, then let us stop negotiating and just continue with the war.”